ISSUE: 566 2024 28 June 2024

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Govt securities to be included in JP Morgan

Bond Index from June 28: Indian government
bonds or government securities (G-secs) would be
included in JP Morgan-Emerging Market Bond
Index beginning Friday, a move that will bring
down borrowing cost for the government. The
inclusion of IGBs will be staggered over a 10-month
period from June 28, 2024 to March 31, 2025,
indicating one per cent increment on its index weight. India's weight is
expected to reach the maximum threshold of 10 per cent in the GBI-EM
Global Diversified, and approximately 8.7 per cent in the GBI-EM Global
Index. This would help attract higher foreign flows, as many overseas
funds are mandated to track global indices.
(Business Line)
MSME ministry targets onboarding 500,000 micro, small
enterprises on ONDC: The Union Minister for Micro, Small & Medium
Enterprises (MSMEs) Jitan Ram Manjhi on Thursday launched an
initiative to facilitate the onboarding of five lakh micro and small
enterprises on the Open Network for Digital Commerce (ONDC)
platform. Titled MSME TEAM, the initiative will provide financial
assistance for onboarding, cataloguing, account management, logistics,
packaging material, and design. “Half of these beneficiary MSEs will be
women-owned enterprises,” the MSME ministry said in a statement.
(Business Standard)
Exchange Rate Automation Module (ERAM) by CBIC to come
into effect on 4th July 2024: The Central Board of Indirect Taxes and
Customs (CBIC) has issued a Circular for the launch of Exchange Rate
Automation Module (ERAM). The automated system of ascertaining and
publishing the exchange rate will replace the existing manual process,
and shall come into effect from 4th July, 2024. ERAM is a significant
step towards trade facilitation as the exchange rates of 22 currencies
would now be published online in advance for ease of consumption by all
importers and exporters. These exchange rates would be made available
on the ICEGATE website twice a month i.e. on the evening of the 1st and
3rd Thursdays of the month and would be effective from midnight of the
following day. Detailed procedural modality has been explained in the
Circular 07/2024-Customs dated 25th June 2024. This automated system
will dispense with the existing system of notifying exchange rates through
a notification. A link shall be provided on the CBIC website which will
take the user to the ICEGATE website, where the published rates can be
viewed. The published exchange rates will be stored in the system and
will remain accessible on ICEGATE for future reference, so as to enable a
user to check the rates for a previous day.
(PiB)

RBI revises framework for currency swap

arrangements with Saarc countries: The
Reserve Bank of India (RBI) on Thursday released a
revised framework for currency swap arrangements
with South Asian Association for Regional
Cooperation (Saarc) countries. This framework will
be effective from 2024 to 2027. Under the
framework, the RBI will enter into bilateral swap agreements with Saarc
central banks that wish to utilise the swap facility. “Under this
framework, the Reserve Bank would enter into bilateral swap agreements
with Saarc central banks who want to avail of the swap facility," said RBI
in a release. “The Currency Swap Facility will be available to all Saarc
member countries, subject to their signing the bilateral swap
agreements,” it said further. A new Rupee Swap Window has been
introduced under the framework, offering various concessions to support
swaps in Indian Rupees. The total corpus for this support amounts to Rs
25,000 crore. The RBI will continue to offer swap arrangements in US
Dollars and Euros through a separate USD/Euro Swap Window, with an
overall corpus of $2 billion.
(Business Standard)
Banks' gross NPA ratio falls below 3%, a first since 2012: RBI
report: Asset quality of commercial banks continued to display the
downward trend, with gross non-performing asset (GNPA) ratio falling to
a 12-year low of 2.8 per cent at the end of March 2024, down from 3.2 per
cent in September 2023. Net NPA ratio also fell to 0.6 per cent from 0.9
per cent during the same period, the biannual Financial Stability Report
of the Reserve Bank of India (RBI) showed. Under the baseline scenario
of stress tests, the GNPA ratio of all scheduled commercial banks may
improve to 2.5 per cent by March 2025, the report said.
(Business Standard)
RBI cautions against surge in private credit between
corporates and non-banks: The Reserve Bank of India (RBI) warns of
systemic risks from the rapid growth of private credit, which has
quadrupled in the past decade, especially due to its opacity and
interconnectedness with banks and non-banks. The RBI highlights
potential vulnerabilities in this segment, including the risk of sharp losses
during a credit cycle downturn and challenges posed by complex
structures and liquidity risks.
(Economic Times)
Truecaller, HDFC ERGO tie up for insurance product to
safeguard subscribers from digital frauds: Caller identification app
Truecaller on Thursday said it has collaborated with general insurance
company HDFC ERGO for an offering that aims to safeguard subscribers
against digital communication frauds in India. Truecaller in a release said
that amid rising cases of cyber fraud, the insurance offering underscores
its commitment to combating fraud and ensuring user protection through
advanced app features - before, during and after mobile communication.
(Economic Times)

Reliance Jio announces tariff hike, industry

to follow suit: A day after the spectrum auctions,
Reliance Jio has taken the lead in hiking mobile
services tariff. On Thursday, Reliance Jio announced
20-25 per cent tariff hikes across most its plans.
Tariff hikes across the telecom industry were
expected after the elections as operators look to ramp
up their revenues to tide over mounting debt.
Vodafone Idea and Bharti Airtel are also expected to announce their plans
to raise tariffs soon Jio’s lowest plan at ₹155 a month for 2GB data saw a
12-20 per cent hike. This could dampen consumer demand particularly
for the people on the economic margins as their demand is not
necessarily elastic. Consumer goods expert Abneesh Roy from Nuvama
Institutional Equities believes that a tariff hike will have a cascading
dampening effect on FMCG demand in general.
(Business Line)
Sebi announces norms to restrict finance influencers'
recommendations: The Securities and Exchange Board of India (Sebi)
on Thursday approved norms to regulate misinformation through
financial influencers or finfluencers by restricting association of its
regulated entities with any unregistered person. In its board meeting the
market regulator said, “The persons regulated by the Board and the
agents of such persons shall not have any association, like, any
transaction involving money or money's worth, referral of a client,
interaction of information technology systems or any other association of
similar nature or character, directly or indirectly with any person who
directly or indirectly provides advice or recommendation.” However, the
market regulator has provided window for investor education from such
associations with a condition that they do not provide any
recommendation or claim any return or performance. The market
regulator has also introduced flexibility in the voluntary delisting
framework by introducing a fixed price process as an alternative to
reverse book building process. Further, it has also provided a an alternate
framework for the delisting of investment holding companies.
(Business Standard)

Stock derivative volumes that cross a set

threshold in six months need to be
discontinued: SEBI: The Securities and
Exchange Board of India (SEBI) has announced
major regulatory changes for the equity derivatives
arena that would lead to a significant change in the
manner in which stocks are selected for the futures
& options (F&O) segment. The board of the capital
market regulator, which met in Mumbai on Thursday, approved a
framework that, as per the watchdog, would ensure a link between the
cash market and derivative segment volume. Among other factors, a stock
will be eligible for entry in the F&O segment only if the average daily
delivery value in the cash market over the previous six months would be
at Rs 35 crore – earlier it was pegged at Rs 10 crore. Further, the stock's
market wide position limit on a rolling basis will have to be at least Rs
1500 crore from the earlier Rs 500 crore.
(Moneycontrol)
Internal fraud detection mechanism of mutual funds in
advance stages: SEBI: The capital market regulator, Securities and
Exchange Board of India (SEBI), said that the Rs 50 trillion Indian
mutual funds (MF) are in advanced stages to setting up internal
mechanism to detect market frauds like front-running, inside trading and
so on. "The MF industry (Association of Mutual Funds of India; AMFI,
the MF industry's trade body) is in advanced stages to complete
formulating the proposal. This is a complex process, hence it has taken
time," said Madhabi Puri Buch, Chairperson, SEBI. Buch said in the first
phase, large fund houses would need to implement it first. She said that
fund houses with size of Rs 10,000 crore and higher would need to
implement this within three months after SEBI issues final guidelines.
Other fund houses would need to implement within six months. In April,
SEBI had decided to modify the mutual fund regulations to make it
mandatory to put in place a structured mechanism to identify potential
market abuse like frontrunning, insider trading and so on.
(Moneycontrol)
Sebi tweaks criteria for inclusion, deletion of stocks from F&O
segment: Market regulator Sebi has revised the criteria for the inclusion
and deletion of stocks from the futures and options (F&O) segment. The
move could lead to the addition and deletion of about two dozen stocks.
The new entrants and exits would play a key role in the selection of
benchmark indices Nifty and Sensex, as only such eligible F&O stocks
find space in the indices. The revision in eligibility criteria comes nearly
six years after the last revision in the selection conditions. Under the new
rules, the market-wide position limit (MWPL), median quarter sigma
order size (MQSOS), and average daily delivery value (ADDV) have been
revised to Rs 75 lakh, Rs 1,500 crore, and Rs 35 crore, respectively.
(Moneycontrol)

RBI KEY RATES FOREX EQUITY

(RBI REF. ) /COMM. MARKET
Repo Rate: 6.50% INR / 1 USD : 83.4896 Sensex: 79243.18 (+568.93)
SDF: 6.25% INR / 1 GBP : 105.5103 NIFTY: 24044.50 (+175.70)
MSF /Bank Rate: 6.75% INR / 1 EUR : 89.2882 Bnk NIFTY: 52811.30 (-59.20)
CRR: 4.50% INR /100 JPY: 52.0500
SLR: 18.00%
BUSINESS/FINANCIAL CONCEPTS
SIX SIGMA
 Six Sigma is a methodology for process improvement developed by a
scientist at Motorola in the 1980s. Six Sigma practitioners use statistics,
financial analysis, and project management to achieve improved
business functionality and better quality control by identifying and then
correcting mistakes or defects in existing processes. The five phases of
the Six Sigma method, known as DMAIC, are defining, measuring,
analyzing, improving, and controlling.
 Six Sigma is a quality-control methodology that businesses use to
significantly reduce defects and improve processes.
 Six Sigma is based on the idea that all business processes can be
measured and optimized.
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